Changes in the Value of Life, 1940--1980

JEL Classifications: J17, J28, J31 We present the first nationwide value of life estimates for the United States at more than one point in time. Our estimates are for every ten years between 1940 and 1980, a period when declines in fatal accident rates were historically unprecedented. Our estimated elasticity of value of life with respect to per capita GNP is 1.5 to 1.7. We illustrate the importance of rising value of life for policy evaluation by examining the benefits of improved longevity since 1900. Our estimated elasticity implies that the current marginal increase in longevity is more valuable than the large increase in the first half of the twentieth century. Dora L. Costa MIT Department of Economics, E52-274C 50 Memorial Drive Cambridge, MA 02142 and NBER [email protected] Matthew E. Kahn The Fletcher School Tufts University Medford, MA 02155 and NBER [email protected]